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February 26, 2013 12:18 PM You Mean It’s the Health Care Prices, Stupid?

By Aaron Carroll

So I finally got around to reading Steven Brill’s piece in Time this weekend. Yeah it took me a while, but man – why so long? I have a number of thoughts on it, although I’ll be very disappointed in you long-time readers if you found much of it surprising.

First of all, IT’S THE PRICES, STUPID! Is this really news to anyone (each of those words is a different link, BTW)? Seriously? Not to beat a dead horse, but it’s one of the ways Switzerland keeps its costs under more control. As Sarah Kliff points out, other countries do this, too. Have you guys really not read or heard us talk about Maryland? Yes, it’s the prices. They are super, super high in the United States. Everything costs more here. Granted, the sensational nature of the piece carries far more weight, but I’m shocked at how many of my Twitter followers got the vapors after reading it.

Second, I was terribly disappointed by this:

Finally, we should embarrass Democrats into stopping their fight against medical-malpractice reform and instead provide safe-harbor defenses for doctors so they don’t have to order a CT scan whenever, as one hospital administrator put it, someone in the emergency room says the word head. Trial lawyers who make their bread and butter from civil suits have been the Democrats’ biggest financial backer for decades. Republicans are right when they argue that tort reform is overdue. Eliminating the rationale or excuse for all the extra doctor exams, lab tests and use of CT scans and MRIs could cut tens of billions of dollars a year while drastically cutting what hospitals and doctors spend on malpractice insurance and pass along to patients.

I’m all for real malpractice reform. But I cannot believe, after reading a kajillion words in this article on how greed and prices are causing hospitals and doctors to bilk patients, Brill resorted to this canard. Does he really think that the reason things cost so much – AFTER WRITING THIS ARTICLE – is because doctors and hospitals are “afraid of lawsuits”? Or might it be the economic incentives?

Third, I’m with Matt Yglesias that, after spending a kajillion words talking about how the prices are the problem, I’m surprised Brill couldnt bring himself to mention all-payer rate setting as a possible fix. Austin is right that the politics are messy, but that doesn’t mean Brill shouldn’t state the obvious.

Finally, for all you consumer directed health plan fans, this is what it looks like when individuals “shop with their own money” for health care. They are left to the whims of chargemasters and ridiculous prices just when they are at their most vulnerable. No one understands the system. No one can make these decisions when they’re scared. Individuals get screwed. It’s not odd that Medicare get the lowest rates – they have a huge market share. Private insurance companies are smaller than Medicare, get worse rates, but still kick individuals’ butts. Individuals get hosed.

UPDATE: After I wrote this, I realized I forgot to say that I still found it quite compelling. It was well written, extensively researched, and I think it will likely move a lot of people in a good direction!

[Originally posted at The Incidental Economist]

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Aaron Carroll ,MD, is an associate professor of Pediatrics and the associate director of Children’s Health Services Research at Indiana University School of Medicine.

Comments

  • Snarki, child of Loki on February 27, 2013 11:03 AM:

    Malpractice insurance spikes whenever the stock market tanks.

    Actual malpractice lawsuits have little to do with it.

  • AMS on February 27, 2013 8:58 PM:

    I've said it before and I'll say it again: defensive medicine is lucrative medicine! It's convenient to blame fear of lawsuits for excessive testing and procedures, but the fact is that the dollars spent on those tests and procedures end up in someone's pocket--and if there's a third party waiting in the wings to pay, then the economic incentives favor more, more, more. Malpractice reform might help a little around the margins, but will make no significant difference as long as those economic incentives are in place.

  • deejaayss on February 27, 2013 10:03 PM:

    Evidence based medicine is like evidence based science. Both require testing. The right tests can yield important clues. The price of tests are much lower in Japan and under Medicare here. Maybe a version of the TV show "The Price is Right" would help the public determine the true cost of medical practice and then we would have quality care at a reasonable price.

  • trashcup on March 07, 2013 8:32 AM:

    It's interesting that when it comes to someone else's health care we want medicine to provide the cheapest possible solution. But when it comes to our own or our family's medical care, we want the very best, highest paid MD and hospital around to treat us because they supposedly have the best outcomes.